Covenant decided to leave the TAO ecosystem, taking 8 figs in capital with them The biggest friction point to adoption here is the misalignment in subnet and network interest
Very few institutions will deploy serious capital until a tangible solution is in place
Here are 10 suggestions that could alleviate this problem:
- Lock-based subnet ownership as const suggests
- Protocol-level IP retention. If a model is trained using Bittensor emissions and network compute the weights and outputs should be retained by the network
perhaps can simply be replicated by another subnet, or the same subnet taken over by someone else?
- On chain revenue sharing
Rayon Labs already does something like this with their auto-staking buyback on SN64 (Chutes) with their inference revenue; It should be standard not optional
- Headless subnet architecture. Remove the dependency on a single founding team entirely
- Vesting schedules on founder emission allocation
This is somewhat entrenched with dTAO but there are loopholes to this, especially in a bull market
- Subnet governance minimums
Treat it like a public company once you're managing other people's capital
- Exit penalties or cooldown periods
- Insurance or protection pools funded by a small percentage of subnet emissions that pay out to alpha holders if a founding team exits or the subnet goes dark. Spreads the risk across the network
- Portable subnet infrastructure
- Reputation and track record scoring on chain
None of these are silver bullets on their own but stacking several of them together would go a long way toward making subnet alpha tokens actually investable and keeping value accruing to TAO rather than leaking out every time a team decides to leave
I've seen my fair share of fraud in listed organisations as an auditor to know the problem comes from human error, be it "intentional" or otherwise
Code is law; "trust me bro" back of the napkin handshakes won't cut it anymore
Follow @TAOInstitute_ - the framework we are building will contribute to the gaps identified